1388.HK WACC - Weighted Average Cost of Capital

The WACC of Embry Holdings Ltd (1388.HK) is 4.5%.

The Cost of Equity of Embry Holdings Ltd (1388.HK) is 6.10%.

The Cost of Debt of Embry Holdings Ltd (1388.HK) is 5.50%.

	Range	Selected
Cost of equity	5.10% - 7.10%	6.10%
Tax rate	14.10% - 40.70%	27.40%
Cost of debt	4.00% - 7.00%	5.50%
WACC	4.0% - 5.1%	4.5%

WACC

1388.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	0.37	0.47

Additional risk adjustments	0.0%	0.5%
Cost of equity	5.10%	7.10%

Tax rate	14.10%	40.70%
Debt/Equity ratio	2.08	2.08
Cost of debt	4.00%	7.00%

After-tax WACC	4.0%	5.1%


Selected WACC	4.5%

1388.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 1388.HK:

cost_of_equity (6.10%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (0.37) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.